After several days of upside, we're looking at seeing a pullback to cool off the RSI on the longer charts. We have seen such overbought conditions lately that we need to pull back. Additionally, we saw lower high on RSI for higher high in price. As I always say, this divergence signals price reversal and change. Now, this doesn't mean that there couldn't be one more leg to the upside.
Realistically, I'm looking at a pullback testing lower supports. Immediate support is at $8,042 with $7,780 and $7,544 (effectively $7,500) as supports below that. $7,500 looks to be a strong support level, but we could also see a test of $6,800.
Indicators favor a pullback, so it's not as likely we will see another leg to the upside, especially since we've pulled back 5% from the top. We might see consolidation like we saw before and undergo five days of sideways trading before the next bull move.
Lots to look out for, but I think we're still plenty bullish not to have to worry for the longer term holders. Still plenty of good trading opportunities coming.
